Sunday, November 16, 2008

The answer is Chapter 11

TCS Daily reported Total compensation per hour for the big-three carmakers is $73.20. That's a 52 percent differential from Toyota's (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59. I don't care how much money Congress throws at GM. With that kind of oversized comp-package they are not gonna be competitive. It's throwin' bad money after a bad cause. What a way to start the new Obama era.

Professor Bainbridge blogged Is the UAW the Problem? "The” problem? No. The automakers have lots of problems. But the UAW is “A” problem.... I have no beef with unions per se. To the contrary, I believe that collective bargaining is both economically rational and morally desirable. I do have a problem with using tax payer dollars to bailout the auto industry so long as their UAW contracts leave them unable to compete either financially or in product quality with the US factories of German and Japanese automakers.

The answer to the Auto problem is the clensing effect of Chapter 11. I agree with JorgXMcKie who commented I’ll only be happy with a bailout that cuts both union and management pay and benefits to the average level in the industry (US), trims work force at both levels to the industry average, and brings rationality to the dealership mess.

As Gateway Pundit pointed out Titan Trader at Power Line Forum asked today:
Why should a taxpayer making $50 grand per year be expected to bail out NON-Skilled Union laborers making $152,256.00 per year. SKILLED Union Electricians who went through two years of day school and four years of night school - paid for by themsleves- make only half as much as the United Auto Workers.
UAW Contracts Put Detroit On Road to Ruin, and A $50B Bailout Would Only Be The Down Payment

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